Sixteenth Finance Commission will be constituted in November

Category : Business and economics Published on: April 12 2023

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The Centre will set up the Sixteenth Finance Commission (FC) by November 2023 to assess the tax resources of the Union government and suggest a formula for their devolution to states and among them, for the five years between FY27-FY31.
Normally, it takes two years for a Finance Commission to give its recommendations. The 15th FC award period is valid till FY26.
Finance Commission is a constitutional body that gives suggestions on Centre-state financial relations.
The previous Finance Commission submitted its report on November 9, 2020, for the 5 fiscals -- 2021-22 to 2025-26 -- to the President.
The 16th FC has to submit its report by October 30, 2025 so that it is deliberated on and factored in the Budget for FY27 to be presented on Feb.
For the current fiscal, the deficit is projected at 5.9 per cent of GDP, lower than 6.4 per cent in the last fiscal ended March 31, 2023.